In a period of rising prices,the inventory costing method that will cause the company to have the lowest income tax expense is:
A)LIFO.
B)FIFO.
C)Weighted average.
D)Specific identification.

Question

Quizplus · Accepted Answer

When faced with increasing costs per unit,a company that uses LIFO will have a lower income tax expense and a company that uses FIFO will have a higher income tax expense.Weighted average is a middle-of-the-road method.Specific identification tracks and identifies each specific item of inventory;as such,its impact on income tax expense cannot otherwise be predicted.

In a Period of Rising Prices,the Inventory Costing Method That